Toward a Practical Theology of Capital (a layman's version)

Impact investing from a Christian perspective necessitates a deep understanding of what the bible says about the issues involved – namely, how to invest, where to invest, and for what purpose. Seems obvious as I write it, and yet prior to last week, “develop a workable theology of capital” was nowhere near the top of my to-do list.

We're far from expert at this stuff, but we at least want to enter (or start) the conversation. A 15-minute Google search suggested this isn’t a conversation happening very many places yet.

But none of these quite address the questions related to what the Bible teaches about investing financial capital. Questions like:

How much return should we expect (is the idea of extracting a 45% IRR in contradiction to the prohibition against usury or is it just shrewd business)?

Should we only invest in companies run by christians (if not, what about the admonition against being unequally yoked)?

Do we always need to seek social/spiritual impact along with financial return? Or is making money for retirement or future giving a sufficient goal?

If it’s true that God designs business as a means of accomplishing His purposes in the world, then we ought to flow upstream and consider what implications this has for the capital that is invested in those businesses.

At an event in Silicon Valley hosted by Praxis before their Business Accelerator Finale, I heard a very successful venture capital investor talk about pursuing a theology of capital that is at once fully secular and fully sacred. Fully secular in the sense that his firm wants to make great financial investments with world-class sourcing, due diligence, structure, management, and exit. Excellence honors God and also earns the right to influence for Christ company founders and other investors. This influence is the fully sacred aspect of his theology statement.

This VC investor explained that he arrived at this idea through a month-long personal study of the book of Daniel, a story about a believer serving secular kings in a secular culture. I guess that's where I'll start.

What else should I read? Who's writing about this? Where can I look to study well on these topics? I appreciate your insights.

Melody Murray, co-founder of Joy Corps and JOYN Bags and recent immigrant from the US to Southeast Asia, shares her perspective on being a foreigner and the promise of Advent.

This Christmas season, I have been remembering that Jesus felt all these things too. He was born into a condition of homelessness. He spent part of his childhood as a refugee in a foreign country and his adulthood with “no place to lay his head” (Matthew 8:20).

Every profession has its hazards. For mine, it’s lawyer jokes and requests for free legal advice. This blog contains neither, but it will provide a little education on the basic forms of corporations so you’ll sound smart when you call your own counsel.

Some states offer a larger array of options; this blog discusses the most popular entity choices including corporations, LLC, low-profit limited liability companies (L3Cs), and benefit corporations.

Anytime someone says, “I’m thinking of starting a nonprofit,” my immediate thought is to make sure I can’t talk them out of it.

As Dan Palotta points out in his semi-famous Ted Talk titled “The Way We Think about Charity is Dead Wrong”, charities/nonprofits face tremendous headwinds toward scalability. Palotta examined the number of organizations surpassing $50M in revenue since 1970, and found only 144 charities reached that level while 46,136 for-profit companies did.

Question: How much impact/financial return will I get from impact investing?

Answer: It depends.

Kingdom impact investing may be easiest to see in the context of poverty reduction and evangelism. But we have seen hundreds of companies tackling a wide range of issues through business models as diverse as bus seat manufacturing, hydroelectric power, software development, and a cattle feed lot. Likewise, the potential return for investors is equally varied.

Should I offer investors a SAFE or a convertible note? What’s the difference and is one always better than the other?

Convertible Note

A convertible note is a type of debt that has the right to convert into equity when a company hits an agreed-upon milestone, typically the next round of funding. If the milestone isn’t hit, the company owes the investors their original capital plus interest. Cite.

SAFE

A SAFE, or Simple Agreement for Future Equity, is “an agreement between an investor and a company that provides rights to the investor for future equity in the company similar to a warrant, except without determining a specific price per share at the time of the initial investment.” Cite

I’m training for the Kansas City Marathon to raise money for World Vision’s clean water initiative. It’s quite possibly the least efficient fundraising strategy I’ve ever tried. Considering the time involved in training, recovery and fundraising it feels like I’ve raised about 25 cents per hour. Fortunately, I don’t think that’s the way we’re supposed to measure success.

I would do the running anyway because I love it and it keeps me mentally and physically healthy. Raising money gives the running even more meaning.

Whether we realize it or not, the degree of influence, and the acceleration of that influence, that key digital gatekeepers are having in our lives and those around the world is exceptional. Big data aggregators with democratically charged algorithms such as Google, Facebook, Amazon, Netflix, and Apple are wielding powerful influence in how we think, where our attention is directed, how we search for the truth, and who has sway in our lives. The question is, where are we going with all this? who's taking us there? And how will this affect our societies, families, and the generations that follow?

I've spent many sleepless nights praying and wishing I could just get some rest. Recently we met Gary Brown, CEO of Spiritual Sleep Therapy and I wanted to share his story on our blog. Here it is in his words. …

One third of Americans (82M people) struggle with insomnia and 15% (36M+) struggle every night, two-thirds of whom are women. Spiritual Sleep Therapy (SST) is the first company to produce sleep sessions that use the most effective elements of cognitive behavioral therapy relaxation techniques combined with the power of God’s Word to help those who struggle with insomnia.

An enterprise whose primary positive impact on the world happens through the way business is conducted. Its leadership, being rooted in Christ, follows the Spirit with intentionality for how they can participate in God's transformational work in the lives of employees, vendors, & customers while creating sustainable value. Read more and discover best practices.

The Verdant leadership team has spent a great deal of time putting together their framework for how they cultivate new opportunities. Starting with small explorations, they then perform a standard set of rigorous tests before committing in a significant way.

Having spent a week with the team on the ground as an outside observer, we noted there are three key drivers of success…